Market Outlook 2004: Muscle Has Hustle, but Retro Is a No-Go

By KEITH MARTIN

Published: January 5, 2004

FOR a few astute collectors, 2003 was a very profitable year, but for everyone else a stock index fund might have been the smarter investment. Yet even if the bulk of collector car prices advanced just a few notches, most owners found more enjoyment in driving their Mustangs and MG's than they did taking their mutual funds out for a spin.

Here are a few highlights of the activity in the collector-car market during 2003:

Vintage Triumphs finally experienced some price appreciation. The TR3's that were $20,000 a year ago are now $25,000 and climbing, while TR4's and TR6's once stalled at the $15,000 barrier sell for $20,000 and more.

Prices of American muscle cars of the 1960's and early 1970's are escalating, especially those with original engines and transmissions that have serial numbers corresponding to the car's body, known to collectors as matching-numbers cars.

Examples with the most powerful engine options can command six-figure prices. In 1971, Plymouth built just a handful of 'Cuda convertibles with the 426-cubic-inch Hemi engine, helping to explain why they currently sell for more than $300,000.

The rising values of the rarest muscle cars have, in turn, pushed up prices for ''clones'' of these models. Rebuilt with high-performance engines and upgraded with trim not installed by the factory, a visually correct clone can bring a higher price than a similar car restored to its original specifications.

For instance, a '71 'Cuda convertible manufactured with a 383-cubic-inch engine but converted to a Hemi can bring $75,000 in as-new condition; with its original engine, it would sell for $60,000.

Because it is possible that a rare car may have been created by modifying a common model, buyers are smart to insist on supporting documents like the factory build sheet. Hiring an appraiser to authenticate the car is one way to help assure the car is worth the asking price.

Detroit's recent attempts to mine collectors' fondness for vintage models have not always resulted in cars that make prudent investments. The odds of Ford's retro-look Thunderbird gaining value anytime soon must have been compromised by the company's announcement that it will quit producing the car next year. The last Chrysler Prowler to come off the assembly sold at auction for $175,000 in 2002, but Prowlers can now be bought all day long for $30,000. KEITH MARTIN